A Firm Has EBIT of $15 Million,interest Expense of $1

question 2

Multiple Choice

A firm has EBIT of $15 million,interest expense of $1 million,and pays taxes of $4 million.The firm has a market-to-book ratio of 5.75.If the firm has 30 million shares outstanding at a current price of $12 per share,what is its ROE?

• A)24%
• B)2.8%
• C)16%
• D)4.2%
• E)18%

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Definitions:

Maintaining

Keeping something in an existing state or condition, often requiring regular check and care.

Motivated

Being driven or encouraged to act or accomplish something, often due to personal desire or external rewards.

Motivational Strategy

Techniques or plans designed to inspire individuals towards achieving certain goals or improving performance.

Maslow's Hierarchy

A theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.